Greece: Stable Economic Climate Index in February

The economic climate index remained at the level of the previous month in February, at 114.0 points (from 114.2), close to the historical maximum level of the last 21 years, according to the Foundation for Economic & Industrial Research – IOBE.

In the euro area and the wider EU, the economic climate has improved slightly. It is stressed that the results of the current survey have not been affected by recent developments in Ukraine. Business expectations improved in Construction and Services, while they deteriorated in Retail Trade and Industry.

The reinstatement of mild restrictive measures did not meet expectations in the tourism sector. On the other hand, expectations deteriorated in all activities of the Retail Trade, mainly in Clothing-Footwear and the vehicle trade. In Industry, the rise of the previous period is assimilated, also at a historically maximum level of more than 20 years.

However, consumer confidence strengthened further slightly in February, mainly because households were anticipating an improvement in the country’s economic situation as a whole, but not their own financial position. The conditions in the Greek, but also in the world economy in the coming period, will depend critically on the developments around the invasion and the war in Ukraine, with the final consequences being premature to be assessed.

While heavy impacts on energy costs are already emerging, broader and stronger geopolitical and economic implications are likely in the medium term to affect global trade flows and relations. A critical factor for economies will also be policy responses at the level of international organizations and by central banks, while the budgetary margins of government response are relatively limited after a two-year pandemic.

In more detail:

– In industry, the mildly positive balance of estimates for orders and demand fell sharply, inventories for estimates escalated marginally and positive forecasts for production in the coming months escalated significantly.

– in Construction, negative output forecasts fell sharply, while employment forecasts improved slightly.

– In Retail Trade, estimates for current sales fell sharply, with stocks escalating sharply, while positive forecasts for short-term sales changed significantly.

– in Services, positive assessments of the current state of the business remained high, those of demand strengthened significantly, and forecasts for short-term demand improved significantly.

– in Consumer Confidence, the negative forecasts of households for the economic situation of the country fell slightly while the corresponding ones for their own financial situation within a year deteriorated. At the same time, estimates for major markets have improved significantly and the intention to save slightly improves.